POM SUBMISSION 21 POM SUBMISSION 21 Submission to the Port of Melbourne Select Committee Preamble As Victoria's leading nature conservation organisation, the focus of this VNPA submission is on the potential impacts on marine and coastal environments that could arise from decisions about the existing Port of Melbourne, an expanded Port of Melbourne, and the siting and operations of a second container port. Measures that could be used to better investigate, monitor and minimise those environmental impacts are also discussed. The submission begins by introducing the issue, followed by comments pertaining to term of reference (c), a discussion on term of reference (b) and concludes with comments under term of reference (g). Although the first two terms of reference are somewhat limiting when it comes to a discussion of environmental impacts, with (c) focusing on only the expansion of the existing Port of Melbourne and its potential environmental impacts while (b) only considers how the conditions of the lease could affect the future establishment of a second container port, this submission considers broader environmental impacts under each and also tackles legislative and other issues under (g). Introduction The Victorian Government has proposed the sale of a 50‐year lease (with a further option of 20 years) over the Port of Melbourne. The lease would effectively establish a monopoly position for container operations in Victoria for the lessee. Under the lease arrangements, should the Government determine that trade growth requires a second container port be built, it could be liable to make payments to the lessee for diverted trade. However, this may not occur if the port reaches capacity and requires the construction of a second container port. The proposed lease sale has generated considerable public debate involving the major Victorian political parties, port users and the broader community. The federal environment minister, Greg Hunt, called it ‘fiscal vandalism and environmental vandalism wrapped up together’1. He called on the government to rule out blasting of The Heads to allow for larger ships to enter the bay, the government responding in the same article by saying that: ‘Any future dredging of the shipping channels in Port Phillip Bay will continue to require the relevant environmental conditions and approvals’. Others have criticised the sale due to concerns about the length of the lease, the effect of a monopoly on user fees, especially on how that may affect agricultural producers, and on the future of a second container port, local transport issues, the need to keep important strategic assets in public hands and the unsuitability of the Port of Melbourne’s location being surrounded by a rapidly expanding Melbourne. 1 The Age 2015 ‘Greg Hunt says plans to lease Port of Melbourne “environmental vandalism”’, The Age 26 June 2015 2 POM SUBMISSION 21 Conclusions 1. Proposals for an expansion of the Port of Hastings or construction of Bay West would cause significant environmental issues in highly sensitive marine and coastal environments. 2. There is lively debate about the future of ports and shipping in Victoria but independent analysis is required to sort the fact from the fiction in relation to trade and container growth rates, maximum port capacities, and the need for a second container port rather than an integration of existing port infrastructure and operations. It is not clear from the available information that a new port is required. 3. Making a choice about the location and timing of a second container port is confounded by the current public debate about expanding the Port of Hasting and the construction of Bay West. The investigation by Infrastructure Victoria should consider a broader sweep of options for future ports and shipping operations in Victoria, but this investigation should be in parallel and integrated with an independent Planning Panel or Victorian Environment Assessment Council investigation tasked with investigating the environmental impacts of the alternatives. Community participation should be a key part of both investigations. 4. A comprehensive monitoring program is essential if we are to understand the condition and extent of marine and coastal values in Victoria and how they may be impacted by various major projects, including those associated with ports and shipping. 5. Before any major expansion of the Port of Melbourne or other of Victoria’s commercial ports, there should be substantive reform of the Environmental Effects Act 1978. 6. Any plans for changes to infrastructure and operations of Victoria’s commercial ports should be consistent with the Port Phillip Bay environmental management plan (in prep.), the objectives and provisions of the future marine and coastal act and cognisant of the issues and trends revealed by the state of the bays reports (in prep.). 7. The projected impacts of climate, as outlined in the Victorian coastal strategy 2014, should be factored into any planning for the use of the state’s marine and coastal environments, including ports and shipping. 8. Governments at the state and local level should ensure that the planning and management of Victoria’s marine and coastal environments is multi‐user, including conservation, with each user given equal standing in any planning and management processes. 9. The Port Phillip Bay Entrance Deep Canyon Marine Community should be listed as a threatened community under the Environment Protection and Biodiversity Conservation Act 1999. Term of Reference (c): the potential impacts on the environment of the further expansion of the Port of Melbourne Port Phillip Bay’s values At almost 2,000 square kilometres, Port Phillip Bay is Victoria’s largest embayment. It is in Melbourne’s front yard and has immense environmental, commercial and recreational value to Victorians. It contains many habitats including sandy seafloor, seagrass meadows, mangroves and reefs, while Ramsar sites are found along its western shoreline. Some of these natural values have been protected in three marine sanctuaries and the Port Phillip Heads Marine National Park. The bay also provides important ecosystem services. The sandy beaches on the eastern shoreline, and the bay’s shallow waters, are the playground of Melburnians for swimming, sailing, diving and recreational fishing. Commercial fishing is another key 3 POM SUBMISSION 21 use. In the bay’s north are the extensive developments associated with the Port of Melbourne, while Corio Bay’s Port of Geelong is found in the southwest corner. Port infrastructure and operations in the bay Port Phillip Bay contains the state’s two largest commercial ports: Port of Geelong and Port of Melbourne. The Port of Melbourne is Australia’s largest cargo, container and automotive port, visited by more than 3,000 ships and with an annual throughput of more than 2,500,000 TEUs2. The average container vessel visiting the port carries about 3,100 TEUs, while the average container exchange is around 1,7003. In the Port of Melbourne there are two main docks, Swanson Dock West and Swanson Dock East, which can currently handle existing trade but the Webb Dock redevelopment will increase capacity by a further one million TEUs. Although almost 87% of the port’s container imports are distributed into the Melbourne metropolitan area, mostly in the west, the port’s catchment extends into southern NSW and south‐ eastern South Australia. Trade growth and maximum port capacity Over the past 14 years container growth for the port has been at an average of 5.9%4 and is projected to grow at 4.8% per year over the next 20 years to be 6.4 million TEUs in 2032‐2033 (2.5 million TEUs in 2012‐13). Over the same period non‐containerised trade grew at only 1.9% and is projected to grow at 0.6% annually to 2032‐2033 to 13.2 million tonnes5 (11.8 million tonnes in 2012‐13) However, to satisfy the projected growth in container traffic through the port, its capacity will need to increase. The upper limit of that increase has been subject to some debate between consultants and has ranged between 5.3 and 8.4 million TEUs per year. So too has the year when maximum capacity is projected to be reached, with KPMG estimating 2035 and Morgan Stanley and Flagstaff Partners believing it will be 20506. Whenever it does, and if trade continues to grow, which is strongly correlated to population and GDP growth, then a new port, the expansion of an existing port or the better integration of Victoria’s ports will be needed. According to the plans for the Port of Melbourne, an increase in the port’s capacity can be achieved by: • Redevelopment of Webb Dock, which will add 1,000,000 TEUs annually. • Improved transport infrastructure for moving bulk goods and containers to and from the port by connecting to the arterial road network and improve the speed of container handling. • Deepening water in the docks to accommodate larger vessels. • A new automotive terminal. • Additional container capacity at Swanston Dock. 2 TEU is equivalent to a 20‐foot container 3 Bureau of Infrastructure and Regional Development 2014, Containerised and non‐containerised trade through Australian ports to 2032‐2033, Research Report 138, Canberra, p.43 4 ibid 5 Ibid p. 48 6 Hawthorne, M 2015 ‘Shipping expert says Greg Hunt's Port Phillip Bay dynamite claims are 'fanciful'’, The Age 2 July 2015 4 POM SUBMISSION 21 Planning in and around the ports The Port of Melbourne has its own planning scheme that is administered by the Minister for Planning. The adjoining municipalities, the cities of Maribyrnong, Port Phillip, Melbourne and Hobsons Bay, also have individual planning schemes. Some expansion of the port’s capacity is currently underway with the redevelopment of the Webb Dock. Any expansion beyond the port’s planning scheme area, or footprint, is constrained by existing and proposed residential and commercial development surrounding it, but within the footprint any expansion could have environmental and amenity impacts on these surrounding areas.